Merrill Lynch & Co. Inc. employees face a U.S. regulatory investigation of suspicions that they improperly profited by trading ahead of client orders, two people with direct knowledge of the inquiry said.
The Securities and Exchange Commission is looking at whether the employees, some of whom have left Merrill, traded in its own account before completing transactions for institutional clients, including Fidelity Investments, said the people, who asked not to be identified because the investigation is not public. The SEC declined to comment Monday. Mark Herr, a Merrill spokesman, would not discuss any specific investigation, except to say, "We cooperate with regulators." Fidelity didn't immediately return a phone call.
